Dunkin Donuts in England - Research Paper Example

Finally, this proposal includes a thoroughly researched site selection process and final implementation strategy. The hallmark of Dunkin’s business model is customer loyalty. John Costello, Dunkin’ Donuts’ Chief Global Marketing and Innovation Officer, identified the opportunities for our team; guests of Dunkin Donuts have developed a connection with the brand that is truly unique. (Restaurant Magazine, 2012) The customer relationships we foster help sustain our profitability and success within the domestic and international markets.

An increase in customer loyalty of only 5% can lift lifetime profits per customer by as much as 95%. For the sixth year in a row, Dunkin’ Donuts has been ranked #1 for coffee brand loyalty by Key Brands Consulting, (Brand Keys, 2012). This recognition is a testament to the quality of the products and services offered in each establishment across the nation. While Dunkin’ enjoys domestic brand loyalty from American’s within the U.S., the competition is gaining strong competitive advantage in England.

For example, Starbucks has opened over 700 stores in the U.K., (Barnett, 2011) which has allowed them to capture brand recognition and customer loyalty in this seemingly untapped market. Dunkin’ Donuts understands how to build, execute, and maintain a better and stronger customer loyalty from offering superior products and value. For this reason, the strategic team believes that expanding Dunkin’ Donuts to the U.K. will prove to be a tremendous success. England is ready to “Run on Dunkin’.

” Strategic Analysis / Operational Plan Before considering global expansion, several factors should be considered including any currency and economic concerns, the current political environment, cultural complexities and potential trade barriers. The strategic analysis will review each of these with respect to expansion into England. The included SWOT analysis (appendix A) will summarize the issues and highlight Dunkin’ Donut’s strengths and weaknesses with respect to the global situation in England.

Currency Concerns The United Kingdom is unlikely to give up monetary policy independence and adopt the Euro (Anonymous, 2012). While this decision has not influenced the high level of foreign investment continued in the U.K., it may be a factor when looking at interest rate risk. However, for the type of direct store structure Dunkin’ Donuts maintains, it should not be considered a barrier to global expansion. Inflation continues to be a concern as it has exceeded the 2% target throughout the past three years.

Current inflation is reflective of the increases in commodity prices, higher import prices caused by the depreciation of the sterling, and the increase in the standard rate of Value Added Tax (VAT) (Monetary Policy Roundtable, 2011). The valuation of the sterling also influences England’s trade by lowering the price of exports relative to the price of imports. This results in a decline of real purchasing power, which could influence whether residents would have discretionary funds available to support new Dunkin’ Donut’s locations.

However, the increase in available jobs that the new locations would bring should have positive